RiskSerializationData

RiskSerializationData

4 0
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FALSE 13440 6498 10560 100
FALSE 13440 6498 10560 500
FALSE 13440 6498 10560 1000
FALSE 13440 6498 10560 1500
FALSE 13440 6498 10560 2000
0
0 FALSE FALSE 10 0.95 1
Base Case
Amazon.com Pro Forma Financial Model
Base 1 2 3 4 5 6 7 8 9 10 Continuing
Income Statement
Revenue Growth 1.500 1.000 0.750 0.500 0.300 0.250 0.200 0.150 0.100 0.060
Revenue $667,000 $1,667,500 $3,335,000 $5,836,250 $8,754,375 $11,380,688 $14,225,859 $17,071,031 $19,631,686 $21,594,855 $22,890,546
Cost of goods sold percentage 1.150 1.100 1.000 0.957 0.938 0.929 0.923 0.920 0.917 0.915 0.915
CGS $767,050 $1,834,250 $3,335,000 $5,586,125 $8,212,438 $10,576,119 $13,136,773 $15,697,428 $18,002,017 $19,768,869 $20,934,991
Depreciation Growth Rate 1.00 0.75 0.50 0.30 0.25 0.20 0.15 0.10 0.06 0.06
Depreciation Expense $15,000 $30,000 $52,500 $78,750 $102,375 $127,969 $153,563 $176,597 $194,257 $205,912 $218,267
EBIT ($115,050) ($196,750) ($52,500) $171,375 $439,563 $676,600 $935,523 $1,197,006 $1,435,412 $1,620,073 $1,737,288
NOL Carry Forward ($120,000) ($316,750) ($369,250) ($197,875) $0 $0 $0 $0 $0 $0 $0
Taxable EBIT $0 $0 $0 $0 $439,563 $676,600 $935,523 $1,197,006 $1,435,412 $1,620,073 $1,737,288
Tax $0 $0 $0 $0 $158,243 $243,576 $336,788 $430,922 $516,748 $583,226 $625,424
Net Income ($115,050) ($196,750) ($52,500) $171,375 $281,320 $433,024 $598,735 $766,084 $918,664 $1,036,847 $1,111,864
Cash Flow
Depreciation Expense $15,000 $30,000 $52,500 $78,750 $102,375 $127,969 $153,563 $176,597 $194,257 $205,912 $218,267
EBITDA ($100,050) ($166,750) $0 $250,125 $383,695 $560,993 $752,298 $942,681 $1,112,920 $1,242,759 $1,330,131
Capital Spending Growth 75.00% 50.00% 30.00% 25.00% 20.00% 15.00% 10.00% 6.00% 6.00% 6.00%
Capital Spending $30,000 $52,500 $78,750 $102,375 $127,969 $153,563 $176,597 $194,257 $205,912 $218,267 $231,363
Working Capital ($166,750) ($406,186) ($769,615) ($1,293,381) ($1,833,181) ($2,233,488) ($2,735,742) ($3,209,938) ($3,600,237) ($3,850,831) ($3,981,205)
Change in Working Capital ($239,436) ($363,429) ($523,766) ($539,800) ($400,307) ($502,254) ($474,195) ($390,299) ($250,594) ($130,375)
Free Cash Flow $20,186 $284,679 $671,516 $795,526 $807,737 $1,077,955 $1,222,620 $1,297,308 $1,275,086 $1,229,143 $1,302,891
Valuation
Risk-free rate 4.00%
Market Risk Premium 6.00%
Beta 1.5000
Cost of Capital 13.00% 13.00% 27.69% 44.29% 63.05% 84.24% 108.20% 135.26% 165.84% 200.40% 239.46%
$18,612,734
Present Value $17,864 $222,946 $465,394 $487,911 $438,407 $517,762 $519,687 $487,995 $424,457 $362,091 $5,483,094
Total PV $9,427,609
Per Share Value $29.46
Chart Data 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Revenue $ 667,000 $ 1,667,500 $ 3,335,000 $ 5,836,250 $ 8,754,375 $ 11,380,688 $ 14,225,859 $ 17,071,031 $ 19,631,686 $ 21,594,855 $ 22,890,546
Net Income $ (115,050) $ (196,750) $ (52,500) $ 171,375 $ 281,320 $ 433,024 $ 598,735 $ 766,084 $ 918,664 $ 1,036,847 $ 1,111,864
Free Cash Flow $ – 0 $ 20,186 $ 284,679 $ 671,516 $ 795,526 $ 807,737 $ 1,077,955 $ 1,222,620 $ 1,297,308 $ 1,275,086 $ 1,229,143
Present Value $ – 0 $ 17,864 $ 222,946 $ 465,394 $ 487,911 $ 438,407 $ 517,762 $ 519,687 $ 487,995 $ 424,457 $ 362,091
Case Model
Amazon.com Pro Forma Financial Model
Base 1 2 3 4 5 6 7 8 9 10 Continuing
Income Statement
Revenue Growth 1.500 1.000 0.750 0.500 0.300 0.250 0.200 0.150 0.100 0.060 0.9999943 Revenue Growth Uncertainty Factor
Revenue $667,000 $1,667,494 $3,334,979 $5,836,214 $8,754,304 $11,380,580 $14,225,709 $17,070,835 $19,631,445 $21,594,579 $22,890,246
Cost of goods sold percentage 1.150 1.100 1.000 0.957 0.938 0.929 0.923 0.920 0.917 0.915 0.915 0.9999859 Cost of Goods Uncertainty Factor
CGS $767,050 $1,834,218 $3,334,933 $5,586,012 $8,212,257 $10,575,872 $13,136,452 $15,697,029 $18,001,546 $19,768,341 $20,934,425
Depreciation Growth Rate 1.00 0.75 0.50 0.30 0.25 0.20 0.15 0.10 0.06 0.06
Depreciation Expense $15,000 $30,000 $52,500 $78,750 $102,375 $127,969 $153,563 $176,597 $194,257 $205,912 $218,267
EBIT ($115,050) ($196,724) ($52,454) $171,451 $439,672 $676,739 $935,695 $1,197,209 $1,435,643 $1,620,326 $1,737,554
NOL Carry Forward ($120,000) ($316,724) ($369,178) ($197,726) $0 $0 $0 $0 $0 $0 $0
Taxable EBIT $0 $0 $0 $0 $439,672 $676,739 $935,695 $1,197,209 $1,435,643 $1,620,326 $1,737,554
Tax $0 $0 $0 $0 $158,282 $243,626 $336,850 $430,995 $516,831 $583,317 $625,520
Net Income ($115,050) ($196,724) ($52,454) $171,451 $281,390 $433,113 $598,845 $766,214 $918,811 $1,037,008 $1,112,035
Cash Flow
Depreciation Expense $15,000 $30,000 $52,500 $78,750 $102,375 $127,969 $153,563 $176,597 $194,257 $205,912 $218,267
EBITDA ($100,050) ($166,724) $46 $250,201 $383,765 $561,082 $752,407 $942,811 $1,113,068 $1,242,920 $1,330,301
Capital Spending Growth 0.750 0.500 0.300 0.250 0.200 0.150 0.100 0.060 0.060 0.060
Capital Spending $30,000 $52,500 $78,750 $102,375 $127,969 $153,563 $176,597 $194,257 $205,912 $218,267 $231,363
Working Capital
Administrator: The growth in revenue from one year to the next is assumed to be linear over months. The base estimate is the last two months of expected revenue (23/78 of the growth + 1/6 of the prior level). Uncertainty is modeled as a constant percentage deviation from the prior level. Cell O31 is the simulated deviation that applies to all years. ($166,750) ($406,183) ($769,608) ($1,293,369) ($1,833,159) ($2,233,459) ($2,735,703) ($3,209,889) ($3,600,180) ($3,850,768) ($3,981,140) 0.9999969461 NWC Uncertainty Factor
Change in Working Capital ($239,433) ($363,425) ($523,762) ($539,790) ($400,299) ($502,245) ($474,186) ($390,291) ($250,588) ($130,372)
Free Cash Flow $20,209 $284,721 $671,588 $795,586 $807,819 $1,078,055 $1,222,740 $1,297,447 $1,275,242 $1,229,310 $1,303,069
Valuation
Risk-free rate 4.00%
Market Risk Premium 6.00%
Beta 1.5000 Beta Uncertainty Factor
Cost of Capital 13.00% 13.00% 27.69% 44.29% 63.05% 84.24% 108.20% 135.26% 165.85% 200.40% 239.46%
$18,615,090
Present Value $17,884 $222,978 $465,444 $487,947 $438,451 $517,809 $519,737 $488,046 $424,508 $362,139 $5,483,772
Total PV $9,428,717
Per Share Value $29.46
Chart Data 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Revenue $ 667,000 $ 1,667,494 $ 3,334,979 $ 5,836,214 $ 8,754,304 $ 11,380,580 $ 14,225,709 $ 17,070,835 $ 19,631,445 $ 21,594,579 $ 22,890,246
Net Income $ (115,050) $ (196,724) $ (52,454) $ 171,451 $ 281,390 $ 433,113 $ 598,845 $ 766,214 $ 918,811 $ 1,037,008 $ 1,112,035
Free Cash Flow $ – 0 $ 20,209 $ 284,721 $ 671,588 $ 795,586 $ 807,819 $ 1,078,055 $ 1,222,740 $ 1,297,447 $ 1,275,242 $ 1,229,310
Present Value $ – 0 $ 17,884 $ 222,978 $ 465,444 $ 487,947 $ 438,451 $ 517,809 $ 519,737 $ 488,046 $ 424,508 $ 362,139
Amazon Chart
Amazon Pro Forma Results

($000)

Revenue 1 667000 1667494.3262831871 3334979.1964038606 5836213.5937067559 8754303.8423226569 11380580.101633877 14225708.992562419 17070834.656613275 19631445.334103528 21594578.734754115 22890246.111221708 Net Income 1 -115049.99999999988 -196723.5769419272 -52453.935397323221 171451.23622174468 281390.26010259509 433113.26436653972 598844.61399609922 766213.75707928301 918811.43094454776 1037008.4559622436 1112034.6689189433 Free Cash Flow 1 0 20209.407013724849 284720.70792759053 671588.001255073 795586.29424332117 807818.95184773882 1078054.883350342 1222739.8184141528 1297447.0111868074 1275242.2225349194 1229310.2658951841 Present Value 1 0 17884.42569290175 222977.94612566108 465443.76002485718 487947.39613394183 438451.11383015587 517808.81462394935 519737.49767476821 488046.33286401333 424507.66411495989 362139.40885210549
1998 is Last Actual Year